With pensions set to join the list of assets liable for IHT, for many families, this ends a major tax break and makes effective planning essential. One of the most powerful tools is gifting. However, when done incorrectly, it can wipe out the benefit entirely.

Getting gifting right

Some gifts are exempt straight away, like the £3,000 annual allowance or small gifts under £250. Larger gifts, known as Potentially Exempt Transfers (PETs) escape IHT if you live for seven years after making them. Regular gifts from surplus income can also be tax free, provided they don’t reduce your standard of living and you keep detailed records.

Detailed record-keeping includes evidence of:

• What was given, when, and to whom
• The value of the gift at the time
• The source of the funds (especially for gifts from income)
• Proof that the gift did not reduce your normal standard of living.

This might include bank statements, written notes of intention, valuations and a spreadsheet tracking dates and amounts. Without this paper trail, HMRC could reject the exemption.

The trap – gifts with reservation

The most common pitfall is the ‘gift with reservation of benefit’ – where you give something away but keep using it. For example, transferring your holiday home to your children, but  continuing to use it rent-free will keep it in your estate for IHT. Hundreds of families fall foul of this each year, with surprise bills running into tens of thousands.

Protect your legacy – speak to us today

With thresholds frozen and pensions entering the IHT net, please get in touch to review your plans and avoid your gifts backfiring, to make sure your wealth passes on the way you intend.

The government has confirmed it will move ahead with plans to include unspent defined contribution pensions in IHT calculations from April 2027.  This marks a major change: until now, pensions have usually fallen outside the estate for IHT, often making them an efficient way to pass on wealth.

What’s changing?

Following consultation, some elements of the original proposal have changed. Death in service benefits paid from registered pension schemes will remain exempt, as will scheme pensions paid to a dependant from defined benefit arrangements and death benefits from collective money purchase schemes.  The government has also confirmed that a deceased person’s legal personal representatives will be responsible for declaring pension benefits within the IHT return to HMRC.

Impact on estates

Around 8% of estates are expected to be affected annually, with average IHT bills rising by an estimated £34,000. The impact could be greater if individuals do not review their arrangements in light of the changes. From 2027, all estates that include pensions will need to assess whether IHT is due, creating potential delays as pension providers and executors share information.

Another concern is the risk of double taxation. Pensions inherited after age 75 are already taxed as income; from 2027, they could also face IHT. This could leave beneficiaries losing more than half the pension value to tax, even at basic rates.

Planning considerations

There are ways to reduce future IHT exposure, such as:

Gifting: Up to £3,000 annually tax-free, with the IHT impact on larger gifts reducing in stages to zero after seven years

Trusts: Though complex, these can remove assets from the estate

Charitable Giving: Leaving 10% of the estate to charity reduces IHT rate to 36%

Whole of life insurance: Written in trust to cover IHT liabilities

Looking ahead

The change highlights the need for careful estate planning. With rules shifting, pensions can no longer be assumed to fall outside IHT. Reviewing your position now – including pensions, property, and other assets – will help ensure your wealth is passed on as intended. With the rules not applying until April 2027, there is still time to plan effectively.

The Great Wealth Transfer is happening, with the UK expected to see a significant shift in assets passed down to younger generations over the next 30 years.
This is perhaps why more people are showing an interest in intergenerational financial planning.

A survey⁶ of financial advisers found that 80% of clients are now concerned about intergenerational planning, compared with 75% in 2022. Clients seem to be recognising this area as an increasing priority, with 39% seeing it as ‘highly important,’ up from 34% three years ago.

This growing focus is likely due to changes announced in last year’s Autumn Budget, which have prompted more advisers to use trusts when IHT planning. Also, record IHT receipts have probably encouraged people to take action to minimise their estate’s tax liabilities.

Who’s getting advice?

Intergenerational planning advice is more in demand, with 68% of clients discussing IHT with their adviser. However, only 47% of advised clients actually have solutions in place to reduce the IHT on
their estate. Despite this advice-action gap, there’s a near-universal agreement that intergenerational planning matters, with 98% of advisers saying it is important to their clients.

The gender gap

Research⁷ suggests that women are at the centre of the Great Wealth Transfer as they are 45% more likely to have inherited assets than men. This puts them on track to control 60% of UK private wealth by the end of 2025⁸. Despite inheriting more, women do not hold as many long-term income generating assets. This could be because 69% of women said they haven’t received financial advice before.

It’s time to start a conversation about intergenerational planning.
Preparation is essential to ensure wealth is passed smoothly and efficiently across the generations.

⁶HSBC Life (UK), 2025, ⁷Unbiased, 2025, ⁸CEBR, 2025

Retirement used to mean the end of working life, but that’s definitely no longer the case. People are living longer, staying healthier and keen to make the most of the time they have left . That’s where financial independence comes in.

What does financial independence mean?
Financial independence means having enough income from your assets, investments or part-time work to cover your desired lifestyle, without relying solely on a pension. It gives you the flexibility to keep working if you want to, or to pursue hobbies, travel, or even launch a second career. Essentially, it’s about choice, not just having enough to get by.

Rethinking retirement
The real goal of financial independence isn’t to stop working altogether, it’s to reach a point where working becomes optional. It’s about building a level of financial security where your investments and other income sources can comfortably support your lifestyle. Whether your income comes from rental properties, shares, or business interests, diversifying your income sources can help reduce reliance on any single pot of money, like your pension. The key is that your money is working for you, not the other way around.

Planning for freedom
Achieving financial independence takes careful planning. It means living within your means, saving and investi ng consistently, and having a clear idea of the life you want in later years and what that life will cost.  Whether you want to slow down or simply shift direction, financial independence gives you the power to choose.  We can help build a plan around your goals, ensuring you have the income and flexibility to live life on your terms, for as long into your later years as you want.

With life moving fast, demands on our time and finances never-ending, it’s easy Then there’s the ‘noise’ created by global geopolitics, economic challenges and their impact on markets and in turn your finances. Sometimes burying your head in the sand (preferably on a summer holiday) may seem like the most favourable option!

When it comes to your finances, neither inertia nor acting in haste is recommended. In fact, making informed, strategic, confident decisions about your wealth has arguably never been more important.

A decade on from pension freedoms: are savers making informed choices? Since pension freedoms were introduced in 2015, many over-55s have been accessing their pensions without understanding the tax implications or seeking advice. Research¹ among over-50s has found that only four in ten had considered the tax implications of withdrawing taxable lump sums, and
just 39% had taken financial advice. Also, while over half took the full 25% tax-free lump sum, many paid off debts or made the peculiar decision to move it into savings. Nearly one in five didn’t seek any guidance at all. With life expectancy on the rise, almost half of over-50s are worried about running out of money in retirement.

‘Lottery effect’ puts pension pots at risk Many retirees risk running out of pension savings by their late 70s as a result of the so-called ‘lottery effect’ (where access to large sums prompts impulsive spending) likely to blame, according to a new study². One in seven see their pension lump sum as a bonus and nearly half access it simply because they can. With the average life expectancy of a current 60-year-old in the UK sitting at 86, some retirees could be left with a shortfall between their retirement funds running out and the end of their life.

With new rules likely to be introduced from 2027 regarding unused pensions becoming subject to Inheritance Tax (IHT), careful planning remains key to long-term retirement security.

How career paths define your pension pot Research³ shows career progression significantly affects pension outcomes. Someone earning £25,000 at 22, with steady 3.5% annual pay rises, could retire at 68 with a £210,000 pension pot, while salary growth of 5% could boost this to £290,000. However, retiring as early as 58, for example, could reduce that pot to £176,000. While rapid career growth helps, burnout or early retirement can limit gains. Therefore, balancing ambitious career choices with wellbeing is critical.

Time to focus on your pension? Whatever life stage you’re at, we’re here to help you make confident, informed decisions. Your pension deserves some airtime.

¹ Royal London, 2025, ² L&G, 2025, ³ Standard Life, 2025

The pandemic, raised geopolitical tensions and supply chain shocks have all forced companies to rethink how they operate. Many, although not all, are moving away from globalisation strategies and focusing on greater resilience instead, with ‘nearshoring’ – bringing supply chains closer to home – becoming the priority.

A transition from ‘just-in-time’ to ‘just-in-case’ logistics Nearshoring reflects a move away from ‘just-in-time’ efficiency towards ‘just-in-case’ preparedness. The need for supply chain stability and faster turnaround times is encouraging businesses to bring their operations closer to the markets they serve. ‘Trump Tariffs’ have only underlined the need for companies to explore their options. This is opening up new opportunities in both developed and emerging markets.

For example, countries like Mexico, Poland and Vietnam are positioning themselves as regional production hubs. Demand is also increasing across sectors such as automation, logistics, real estate, infrastructure and advanced manufacturing, as companies modernise supply chains closer to home.

A temporary trend or lasting change? While some view nearshoring as a short-term response to recent disruptions, others see globalisation weakening. Perhaps, but labour costs in Nearshoring destinations are oft en higher than in traditional off shore markets, while infrastructure and policy support can vary widely. Also, restructuring supply chains is complex, expensive and time-consuming. Political risk and protectionist policies all add to the challenges.

What do the professionals think? According to investment manager PGIM, despite rising tariffs and shifting trade, around 75% of the world’s economy remains focused on global integration
rather than nearshoring. Shehriyar Antia, Head of Thematic Research at PGIM, explains, “Even if America’s ‘small yard’ of protected industries grows larger, companies in most industries will still seek out the benefi ts of free trade and competitive advantage.”

An evolving investment theme While nearshoring will create new investment opportunities, choosing the right ones takes careful research. As the global economy evolves, those who identify and understand long-term trends are likely to be rewarded. You can rely on us to do just that.

The new tax year is a great opportunity to take charge of your finances and set yourself up for financial peace of mind by knowing you have a plan in place. By planning ahead and making the most of available allowances, you can optimise your wealth, reduce tax liabilities and work towards long-term financial security. Here are some key steps to consider:

Take advantage of tax-efficient opportunities

With the new tax year allowances in place, now is the time to make smart financial decisions:

• Maximise your ISA allowance Contribute up to £20,000 (the current annual allowance) into an Individual Savings Account (ISA) and benefit from tax-free growth
• Make the most of your Capital Gains Tax allowance Use your annual exemption to minimise tax on investment profits
• Boost your pension contributions Take advantage of tax relief while also potentially lowering your taxable income
• Plan for Inheritance Tax (IHT) efficiently Lifetime gifting can help reduce the impact of Inheritance Tax, allowing you to pass on more to loved ones.

Build a solid financial plan for a stronger financial future Taking time to review and refine your financial plan can help you stay on track for the future. With proactive tax planning and disciplined habits, you can build a stronger financial foundation and make informed decisions that align with your long-term goals.

Whether you’re looking to grow your savings, invest more efficiently, or plan for retirement, taking action now can make a significant difference. We’re here to help you explore your options and   ensure you’re making the most of the opportunities available. Your future self will thank you!

US Vice President JD Vance spelled it out in Munich – “there is a new sheriff in town” – and that sheriff’s policies are already having far-reaching consequences. While dealing with geopolitical uncertainties is clearly nothing new for long-term investors, Trump’s re-election has once sound investment approach based on careful planning and positioning of assets.

Global growth has stabilised

In its latest assessment of world economic prospects, the World Bank highlighted several positive developments in the global outlook. Specifically, it noted that global growth stabilised at 2.7% in 2024, after a series of negative shocks, and that this rate of expansion is expected to hold steady across 2025 and 2026. It also emphasised that, with appropriate policy  interventions, current global challenges could be transformed into opportunities, fostering a more resilient world economy.

Policy uncertainties

The World Bank did, however, warn that heightened uncertainty and adverse trade policy shifts represent key risks to global trade and economic growth prospects. Protectionism is back and could lead to shifts in global economic structures, YOUR WINDOW ON WEALTH including changes in trade alliances and manufacturing bases, while the increased costs of imported goods due to tariffs could have inflationary consequences.

A permanent fixture

Another aspect of Trump’s new tariff push is that it seems to represent a long-term policy shift with multiple objectives. It has a national security aspect, for instance, aiming to address immigration and drug-smuggling concerns; it has an economic leverage element designed to deal with trade imbalances, and is also viewed as a potential revenue generator to fund tax cuts. In essence, the trend to protectionism appears set to become the new norm, necessitating a need for strategic investment approaches in a shifting landscape.

Take control

Experienced investors know the importance of staying calm during periods of market uncertainty and the need to continue basing investment decisions on sound financial planning principles. And, right now, the adoption of appropriate diversification and risk management strategies undoubtedly offer investors the safest route through any volatility in an increasingly protectionist world.

Chancellor Rachel Reeves announced plans to include unused pension funds and death benefits within the value of estates for IHT purposes, during the Autumn Budget 2024. Under the proposals, pension administrators will report and pay IHT directly to HMRC.

Death-in-service benefits paid out by employers have traditionally been separate from personal pensions for the purposes of calculating an IHT bill. By including unused pensions and
death-in-service benefits in IHT calculations, more estates could face higher taxes.

This announcement came as a surprise, particularly to those who have worked hard to build a pension as a tax-efficient way to pass wealth on to loved ones. Any changes are likely to have the greatest impact on people with established estate plans.

Timeline

A 12-week technical consultation on the proposed changes concluded on 22 January. Once the feedback has been reviewed, government consultation principles outline that responses should be published within 12 weeks. By the third quarter of the year, the government is expected to provide specific implementation guidance on how pensions and death benefits will be treated under the new regime. Any changes won’t take effect until 6 April 2027.

As proposals are not finalised, it’s wise to consider potential implications but await the final guidance before overhauling plans. This still gives us ample time to make changes before implementation in 2027. A review of existing pension arrangements would be useful so we can think about how the proposed changes could affect what your beneficiaries would receive.

Time and knowledge

Rest assured we are monitoring developments and will keep you in touch as we know more. When we have more certainty, we may suggest you consider alternative options that ensure your estate remains as tax efficient as possible and aligned with your goals. Together, we’ll help you secure your family’s future with confidence.

A couple of months have passed since the Autumn Budget, a significant milestone for the Labour government. A comprehensive set of measures impacting individuals and businesses were announced, featuring £40bn in tax increases. Key announcements involved Inheritance Tax, Capital Gains Tax, domicile status, VAT on private school fees, Stamp Duty and Income Tax thresholds.

Inheritance Tax (IHT)
Following weeks of speculation, changes to IHT were widely expected. The freeze on IHT thresholds at £325,000 has been extended to 2030 and, from April 2027, pension pots will be considered part of taxable estates. This significant shift is likely to mean that more estates will be subject to IHT from the 2027-28 fiscal year, impacting those who have relied on pensions as a tool for inheritance planning. Reviewing your retirement and estate planning now, ahead of this change, is advisable.

Business Property Relief (BPR) and Agricultural Property Relief (APR) are also seeing changes. From April 2026, the first £1m of combined business and agricultural assets will not be subject to IHT; for assets over £1m IHT will apply with 50% relief at an effective rate of 20%. This reduction could impact succession planning, particularly for small business owners and family  farmers.

Capital Gains Tax (CGT)
CGT increases were announced, with the basic rate moving from 10% to 18% and the higher rate from 20% to 24%. These changes were effective from 30 October 2024. Additionally, the CGT rates on carried interest will rise to 32% from April 2025, with further reforms scheduled from April 2026.

The rate for Business Asset Disposal Relief and Investors’ Relief will increase to 14% from 6 April 2025 and then to 18% from 6 April 2026. The lifetime limit for Investors’ Relief was reduced to £1m for all qualifying disposals made on or after 30 October 2024, matching the lifetime limit for Business Asset Disposal Relief.

Non-domiciled (non-dom) status
The familiar non-dom tax regime will be phased out from April 2025, to be replaced by a residence-based scheme. This includes ending the use of offshore trusts to shelter assets from IHT and scrapping the planned 50% tax reduction for foreign income in the first year of the new regime. Individuals who opt in to the regime will not pay UK tax on foreign income and gains (FIG) for the first four years of tax residence. To incentivise investment, the Temporary Repatriation Relief will be extended to three years, offering reduced rates on gains and income for wealthy investors considering bringing assets into the UK.

VAT on private school fees
As indicated in the Party’s election manifesto, the Chancellor confirmed plans to introduce VAT on private school fees (except for children below compulsory school age) from January 2025 and to remove private schools’ business rates relief from April 2025.

Stamp Duty
The Stamp Duty surcharge on second homes and investment properties will increase from 3% to 5% above standard residential rates, effective immediately. This change is expected to temper demand in second homes and the buy-to-let market, particularly in high-value areas like London.

Income Tax
The Income Tax Personal Allowance and higher rate threshold remain at £12,570 and £50,270 respectively until April 2028. From April 2028, these personal tax thresholds will be uprated in line with inflation.

Investments
• The annual subscription limits will remain at £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds until 5 April 2030. The government has confirmed it will not proceed with the British ISA due to mixed responses to the consultation launched in March 2024
• The starting rate for savings will be retained at £5,000 for 2025/26 • The Enterprise Investment Scheme and Venture Capital Trust schemes have now been extended to 2035.

Bottom line
If you have any questions, please get in touch. We’re here to help you understand the impact these changes could have on your specific circumstances and to help you adapt your financial strategies to ensure you stay on track towards your goals. With the 2024/25 tax year end ticking round, we can talk it through.